Customs, Excise and Gold Tribunal - Mumbai
The Bombay Dyeing & Manufacturing Co ... vs Commissioner Of Central Excise, Mumbai ... on 14 March, 2001
ORDER
Gowri Shankar, Member (Technical)
1. Bombay Dyeing Manufacturing Co. ltd. is engaged in spinning of yarn and weaving of fabrics which it subjected to dyeing and other processes. For the purposes of dyeing of fabrics, the appellant employs a machine in which the dyed fabrics is passed through a molten mixture of four metals, bismuth, cadmium, lead and tin. Bismuth predominates, accounting for about 40% by weight of the total mixture. The appellant purchases each of these metals and, after mixing them together in the Stand-fast Molten Melting Machine, the mixture is a molten state. The dyed fabric is passed through this mixture to burn off excess dye clinging to it.
2. Five notices issued to the appellant alleged that by this process the appellant manufactured on alloy of bismuth falling under Heading 81.06 of the tariff, and demanded duty on his alloy. The notice dated 7.3.1994, which demanded duty for the period between 1.4.1989 and 31.12.1993 invoked the extended period contained in the proviso under sub section (1) of Section 11A of the Act alleging suppression of these facts of manufacture. The other four notices were for the normal period of six months.
3. Adjudicating upon these notices, the Commissioner, in the order impugned before us in this appeal, has held that the appellant manufactured bismuth alloy, which is liable to duty. He has confirmed the availability of the extended period of limitation, demanded duty and imposed a penalty.
4. The counsel for the appellant contends that the extended period of limitation would not be available to the department. The machine had been in the factory for a number of years before the first notice was issued. The local range office was situated in the appellant's factory. The machine was of a large size extending to 30 metres x 3 metres. The officers could not have failed to see the existence of it and the fact of melting of the metals. In reply to a question, the counsel for the appellant agrees that the machine was enclosed. In that situation, we do not see how the fact that the officers may have passed by that place, revealed to them that the activity of alloying was taking place. None of the audit report or documents which the counsel for the appellant relies upon show that the fact of alloying of the metal was either brought to the notice of the department by the appellant or that the officers themselves had noticed. In these circumstances, we are not able to say that the extended period will not be available.
5. There remains the question of the marketability. One of the contentions taken before the Commissioner was that the item was not marketable. There was not other buyer for the goods. In the course of the hearing it emerged that at some point in the past, three other textile manufacturers were employing such a machine. If that is the case, the departmental representative says by any one of these three could have found use for the ally, and therefore it was capable of being marketed. He emphasises judicial pronouncements to say that it is not necessary to establish the marketability of a commodity for it to be excisable, it is sufficient if marketability of the product, it capability for being bought and sold is established.
6. The counsel for the appellant agrees that at some point in the past three other such textile manufacturers were using such a machine, which he says are no longer in existence. Neither side is in a position to say whether during the period with which we are concerned whether such machine was in use. The Commissioner has not dealt with the question of marketability at all though it was raised before him. In the light of this, we allow the appeal and remand the matter to the Commissioner for the limited purpose of deciding upon the marketability of the goods. Either side is a liberty to produce such evidence and the commissioner shall, after hearing the parties, pass order according to law.